2010-03-04 / Local & State

Budget Mess Aside, What About The Other Problems?

By Marc Levy ASSOCIATED PRESS WRITER

HARRISBURG, Pa. (AP) – Pennsylvania’s worrisome fiscal condition aside, there are several other long-standing financial thorns – such as an underfunded transportation network – that state government has failed to address, even in good financial times.

Now, Gov. Ed Rendell and legislators are being forced to discuss these matters in an election year when the recession has left unemployment high, jobs scarce and voters uneasy about government deficits.

“We can no longer ignore these issues,’’ said Johnna Pro, a spokeswoman for state House Appropriations Committee Chairman Dwight Evans, DPhiladelphia. “Lawmakers will have to make some very difficult choices.’’

For starters, the state is still counting on the Federal Highway Administration to approve its 2 1/2-year-old application to add tollbooths to Interstate 80.

That’s worth an extra $450 million a year to highways, bridges and mass transit systems. But even with that money, the state would be $750 million short of what a Rendell-appointed commission recommended be spent annually to maintain Pennsylvania’s transportation infrastructure.

If the feds reject Pennsylvania’s tolling plan – and no tolls have ever been added to an existing portion of the federally funded interstate highway system – there’s an alternative: The Pennsylvania Turnpike Commission could continue borrowing the money for three more years, as it is currently doing.

But, eventually, legislators will need to find the money elsewhere.

“The last thing that we want to see happen here in Pennsylvania is some type of tragedy similar to what happened in Minnesota,’’ where a 2007 bridge collapse killed 13 people, said Delaware County Rep. William Adolph, the ranking Republican on the House Appropriations Committee. “I think the taxpayers of Pennsylvania would also agree with that.’’

Then there’s the state-subsidized adultBasic health insurance program, which offers coverage to lower-income adults for a monthly fee that will increase to $36 in March.

Rendell wants the program to continue covering as many as 50,000 low-income adults. But a six-year commitment by the state’s nonprofit Blue Cross and Blue Shield insurers is set to expire Dec. 31, leaving about half the money for the approximately $200 million adultBasic program in limbo.

The Blues are signaling that they do not want to continue the same level of commitment to the program – which has an approximately two-year waiting list –and are suggesting that other insurers help out.

Discussions among the insurers, the Rendell administration and top legislators are getting under way.

One of the costliest problems facing the state right now is the massive debt accumulating in the trust fund that pays unemployment benefits.

Pennsylvania has borrowed more than $2 billion from the federal government – fourthmost behind California, Michigan and New York – thanks to the recession and a two-decadeold law that limits the tax collections that can go into the fund.

Even counting the penalties on employers and employees that kicked in this year – more are scheduled to start next year – the state Department of Labor and Industry projects the fund to be underwater by $7 billion in 2018.

A plan to correct that is being written into legislation, 15 months after Rendell asked negotiators for Republicans, Democrats, business groups and labor unions to address it.

Under the plan, taxes on employers and employees would rise in hopes that the debt is fully paid and the state ends 2018 with a positive balance in the fund. The scope of benefits will be scaled back, such as a proposal to limit the ability of a higher income worker to collect severance pay and an unemployment check at the same time.

Senate Labor and Industry Committee Chairman John Gordner, R-Columbia, said he hopes to see the Legislature pass it this spring.

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